A. BACKGROUND

The World Bank (WB) and the European Union (EU) have been implementing a hybrid Trust Fund (TF) aimed to support the efforts of the Government of Mongolia (GOM) to improve fiscal discipline, public financial management (PFM), as well as transparency and accountability processes for strengthened governance in Mongolia. 

This TF, through both Recipient Executed (RE) and Bank Executed (BE) interventions, serves two main purposes. Firstly, it complements and expands the ongoing technical assistance the WB is providing through the Strengthening Fiscal and Financial Stability (SFFS) Project. Secondly, this TF supports the GOM in advancing the current efforts toward increasing transparency, participation and accountability in fiscal matters as well as in strengthening its capacity to deal with non-technical drivers of the reform process that prevent state agencies from implementing policies and regulations as intended. 

The Component 2 of the TF focuses primarily on supporting the specific needs of the GOM to establish sound fiscal discipline, to improve expenditure management by strengthening the budget credibility, to establish the foundations for medium-term budgeting, and to re-orient public investment to strategic projects linked to the diversification of the economy. Five priority areas constitute the core of the component: (i) development and implementation of a public financial management reform plan and inter-agency coordination; (ii) strengthening budget preparation and execution towards results-based medium-term budgeting; (iii) improving budget reporting and transparency by increasing the comprehensiveness of fiscal and financial information and reporting; (iv) improving the management of contingent liabilities, through improving the existing governance framework for recognizing, managing, and disclosing contingent liabilities; and (v) strengthening public investment management, through the development and implementation of mechanisms for prioritizing capital project proposals and cost-benefit analysis.

The Government of Mongolia (GOM) has undertaken reforms to gradually bring about fiscal discipline and strengthen the PFM system. The first phase of reforms between 2003 and 2008 established the basic elements of the system, including strengthening internal controls, cash management introducing single treasury system, and accounting and reporting. The second phase of reforms between 2008 and 2012 contributed to enhancement of fiscal legal framework with enforcement of the Fiscal Stability Law and revised edition of the Budget Law establishing fiscal rules and strengthening fiscal discipline and fiscal decentralization. Subsequently, the GOM approved in late 2018 an overall PFM strategy that is ambitious but attempts to set forth general principles and areas of intervention. 

The PFM Reform Action Plan for 2018-2022 defines the transition from the MTFF to MTBF as one of the key agendas on budget reform policy in Mongolia. Hence, within the framework of strengthening PFM and implementing the Action Plan, Mongolia is aiming to introduce results-quality-performance-based medium-term budgeting shifting from traditional input-based budgeting. 

Results-quality-performance-based financing reform has been implemented in the health sector since 2021 – transiting from input-based line-item budgeting to output-based financing of all level of healthcare services from the single pool of the state budget through the Health Insurance Fund (HIF). The legal framework to support this reform has been enhanced through the necessary amendments to the Health Law, Health Insurance Law, and Health Service Law that were approved by the Parliament in August 2020. 

Funding of the COVID 19 healthcare measures from the HIF between 2020 and 2022 put the HIF at risk and hindered the implementation of the envisioned reform for the sector. Although the Ministry of Finance (MOF) has taken measures to sustain the HIF, the HIF is faced with a risk in financing the main healthcare benefit packages.

Thus, in order to improve the financial management system and practices of the HIF, the MOF wishes to engage a national consultant to identify main challenges and risks faced by the HIF and propose appropriate actions to improve the stability of the HIF.

B. OBJECTIVE OF THE ASSIGNMENT

The objective of the assignment is to provide support to the MOF to identify the baseline costs, cost drivers and baseline performance metrics of the HIF to inform the implementation of performance informed budgeting.

C. SCOPE OF WORK

Key responsibilities will include, but not be limited to, the following:

1. Analyze revenues, expenditures and balance of the HIF for the last three years;
2. Analyze and identify the key drivers of revenue and expenditures of the HIF;
3. Identify appropriate outputs and outcome indicators associated with the operation of the HIF (performance metrics);
4. Seek to project the baseline levels of revenue and expenditure of the HIF on a “no policy change” basis for three years (i.e. what would be appropriate estimates of revenue and expenditure of the HIF if policies regarding health service delivery policy, funding or performance standards do not change.
5. Identify expected performance outcomes (using metrics identified above) associated with existing policies and funding levels – thus establishing a reasonable estimate of baseline performance associated with the baseline funding assuming no policy change.
6. Identify potential fiscal risks associated with health insurance funding and performance.

D. DELIVERABLES 

1. An analytical report on the key drivers of revenue and expenditures of the HIF;
2. A list of outputs and outcome indicators that can represent the performance of the HIF operation;
3. Forecast of the HIF estimation for 2023-2025 under "no policy change" scenario;
4. Estimate of baseline performance associated with the baseline funding assuming no policy change; and
5. A list of  potential fiscal risks associated with health insurance funding and performance along with a reasoned explanation.

E. CONSULTANT’S QUALIFICATIONS/SELECTION CRITERIA

Education: A suitable candidate should have at least bachelor degree in a relevant field: business administration, financial management, public finance and/or other related field;

Experience: The incumbent should have at least seven (7) years work experience in health sector financing and policy making; knowledge and understanding of strategic purchasing and health financing reform would be given preference.

Language skills: Fluent written and spoken skills in Mongolian and English.

Other skills: 

• An understanding of the concepts of good practice in public sector budgeting, including gender responsive budgeting, for example as set out in the PEFA framework is desirable.
• Excellent interpersonal skills with the ability to function effectively and collaboratively in a team environment and high integrity and accountability;
• Be proficient in PC-based applications such as Word, Excel and data management, and have excellent web research and navigation skills; 
• Be able to work overtime if required.

F. SUPERVISION AND REPORTING 

The consultant will report directly to the Head of the Budget Expenditure Division (BED) and Director-General of the FPPD, MOF and will work with officers and local consultants of the FPPD on all matters related to the assignment. The Head of the BED and the Director-General of the FPPD will meet regularly with the consultant to review progress with the work program/tasks detailed under this TOR and to resolve any outstanding issues. The consultant will also work closely with relevant officials of the MES and local governments.

The consultant will be required to carry out his/her tasks in line with the approved Work Plan which will serve as the basis for measuring progress on desired outcomes and goals for the entire consultancy service.

All information provided to the consultant shall be regarded as confidential and information shall not be shared with any outside individuals or organizations.  

G. INSTITUTIONAL ARRANGEMENTS

The client will provide an office space, assign the officials to accept deliverables stated in the contract and provide all necessary materials required for undertaking the assignment. The consultant shall bring his/her own computer/laptop.

H. CONTRACT DURATION AND PAYMENT CONDITION

The consultant's work is expected to commence in December 2022. The contract will be for a period of three and half (3.5) months.

The consultant’s approved work plan will serve as the basis for measuring progress on desired outcomes, goals and payments for the entire consultancy service. The Client will review the performance of the consultant in delivering the work and can make changes to the TOR, if deemed necessary, based on mutual discussion and agreement. 

H. CONTRACT DURATION AND PAYMENT CONDITION 

The assignment is expected to commence in December 2022. The total duration of the consultancy service is estimated to be 3 months. 

The consultant will be required to carry out his/her tasks in line with the approved Work Plan, which will serve as a basis for measuring progress on desired outcomes, goals and monthly payments for the entire consultancy service. 

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